Best Practices for Firing Employees

Involuntary terminations—firings or layoffs—are seldom pleasant experiences for either manager or employee, but it’s more unpleasant for everyone involved if you wait too long to let someone go. Involuntary terminations come in two types:

Layoffs: A layoff, also known as a reduction in force, occurs when an organization decides to terminate a certain number of employees for financial reasons. For example, your company loses several key contracts and the revenue that was projected to come with them. To stay afloat, your firm may have to reduce payroll costs through layoffs.

Firing: Employees are fired when they have no hope of improving their performance, when job descriptions need to evolve and the people in the jobs aren’t able to evolve along with them, or when they commit an act of misconduct that is so serious that termination is the only choice.

An 1884 Tennessee court decision (Payne v.Western & A.R.P. Co., 81 Tenn. 507) established the termination-at-will rule within the United States. This rule said that employers have the right to terminate employees for any reason whatsoever—including no reason—unless a contract between employer and employee expressly prohibits such an action.

However, more than 100 years of court decisions, union agreements, and state and federal laws have eroded the ability of employers to terminate employees at-will. The federal government, in particular, has had the greatest effect on the termination-at-will rule, particularly in cases of discrimination against employees for a wide variety of reasons.

At-will still exists on a state-by-state basis, and some companies require prospective employees to sign a statement confirming termination-at-will when they’re hired. Be sure to check your local regulations.

People generally agree, however, on certain behaviors that merit firing. Some of these behaviors are considered intolerable offenses that merit immediate action—no verbal counseling, no written warning, and no reprimand or suspension, just immediate and unequivocal termination. They generally include these behaviors:

Incompetence: Despite your continued efforts to train them, some employees can’t perform their duties at an acceptable level of competence.

Repeated, unexcused tardiness: If an employee continues to be late to work afteryou warn him that you won’t tolerate this behavior, you have clear grounds for termination.

Insubordination: The deliberate refusal to carry out one’s duties is grounds for immediate termination without warning.

Physical violence: Most companies take employee-initiated physical violence and threats of violence very seriously.

Theft: Most companies that catch employees engaging in this nasty little practice terminate them immediately and without warning.

Sexual harassment: Unwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature on the job are intolerable offenses in many organizations and subject to immediate termination.

Intoxication on the job: Although being drunk or under the influence of drugs on the job is sufficient grounds for immediate termination, many companies nowadays offer their employees the option of undergoing counseling with an employee assistance program.

Falsification of records: Falsifying records is another big no-no that can lead to immediate dismissal.

Keep in mind that just because you can terminate an employee immediately for any of these offenses doesn’t mean you should. For example, if an employee doesn’t know how to do his job, you may decide to provide additional training opportunities instead of terminating him.

When it does come time to fire an employee, these guidelines can help you make this difficult transition a little easier:

Make it clear when expectations aren’t being met. Bring up your concerns and the reasons behind them. It’s unfair (and frankly, wasteful) to fire someone without giving her the opportunity to improve. Give specific feedback and an exact date by which you expect to see a change.

Offer a 0 percent increase as a raise. Typically, in this approach, the person quickly falls in line or ends up leaving of his own accord. Either way, your problem is solved.

Act quickly to dismiss. When all is said and done, if someone isn’t working out well, the sooner you deal with the situation, the better it’ll be—for the employee, yourself, and the workgroup.

Follow through quickly. Don’t hem and haw, or threaten to fire someone repeatedly and not actually do it. When it comes time to let someone go, rip off the Band-Aid.

Watch your timing. You should fire someone at the end of the day or over lunch. Being let go is a source of shame, and there’s no reason to call attention to the matter by forcing someone to pack up his desk in the middle of the afternoon and walk through the building while everyone stares.